Hawai'i's experiment with gasoline price controls could end as early as next week under an agreement reached between the House and Senate late last night.

Under the bill, the current price cap law enacted in September would be suspended for two years, then repealed. Cap wholesale prices would be still calculated, but at a rate 15 to 20 cents below the current cap, and price controls would be implemented only at the governor's discretion. The bill also requires more disclosure of oil industry profits.

The bill still needs to be approved by both the House and the Senate, which appears likely. It would take effect upon becoming law, which would occur immediately if Gov. Linda Lingle signs the bill.

Lingle also could veto the bill, or allow it to become a law without her signature, which would occur about 45 business days after the session ends.

The Democrat-controlled Legislature passed the cap in part to link Hawai'i's pump prices to the fluctuations found in more competitive Mainland markets. It was thought such a link would benefit consumers by lowering local prices when Mainland pump prices fell.

The law took effect during a period when gasoline prices across the nation have been high. Whether the cap help or hurt consumers is debatable. However, momentum to end the price cap has mounted as the cap has allowed wholesale prices to rise in nine of the past 10 weeks. Gas prices are the highest they have been since just after the cap was put in effect in September.

Even if the cap is suspended, it could be weeks before Hawai'i's gasoline market shakes off the effects of price regulation, which has included higher than normal volatility and geographic disparity in prices.

Also, a recent spike in oil prices shows little sign of abating, which will continue to put upward pressure on Hawai'i's gasoline prices.

Still, if the cap is lifted "we're not going to see 15-cent increases every Monday for four Mondays in a row," said Bob Swartz, who operates Chevron stations in Kalihi, Kane'ohe and Kailua. "You're not going to see a 50-cent decrease in one week like we had in September."

Price changes "are going to be more often, but more subtle," Swartz said.

Lingle has not said whether she would want the discretion to implement a cap. However, she said such a move seems aimed at spreading responsibility for price regulation, which she opposes.

"I think it's a difficult issue for them (the Legislature)," Lingle said earlier this week.

"From the beginning I've said the gas cap was a bad idea. It's not a concept that I support."

Even if the proposed cap is never implemented by Lingle, the cap levels — which would be posted weekly — would allow consumers to judge for themselves whether pricing controls should be re-implemented, said Sen. Ron Menor, D-17th (Mililani, Waipi'o), a key supporter of the gas cap.

The major sticking point between the Senate and House was on how to determine what constitutes "fair" prices. The Senate pushed for a price cap formula that would set maximum wholesale prices about 15 cents to 20 cents lower than the current cap. House members contended the Senate's price cap formula was arbitrary and may have given consumers the impression gasoline prices are unduly high.

Whether gasoline prices will be lower without the cap is difficult to determine, said Jack Suyderhoud, a business economics professor at the University of Hawai'i-Manoa.

Before the cap the average price for regular in Hawai'i was 43 cents a gallon higher than the national average, he said. Under the cap that gap widened to 48 cents a gallon, Suyderhoud said.

"The gap between Hawai'i and Mainland prices should come down, but that doesn't mean prices will come down," he said.

Reach Sean Hao at shao@honoluluadvertiser.com.